Lender FAQs

Home100 General Program FAQ

How do I become a lender?

Lenders must be approved by U.S. Bank HFA Division to participate in the REI Home100 Program.  US Bank serves as the Master Servicer and purchases the loans associated with the Home100 Program.  Interested lenders should contact:

Dena Sherrill, Director of Housing at dsherrill@reiok.org
Jeremy Layman, Housing Manager at jlayman@reiok.org

***Third Party Origination is not allowed***

What are the first mortgage interest rates?

REI Down Payment Assistance sends the first mortgage interest rates daily on a rate sheet email and posts on the lender portal at www.reihome100.org by 9:00 A.M. Central Time. Should you wish to be added to the daily rate sheet email list, please contact us at reidpa@reiok.org.

All loans must be delivered and purchased by U.S. Bank within 60 days of rate lock.  An extension can be purchased if needed. Please see the program summary via the link at the bottom of the page for more detailed information.

Does the borrower have to be a first-time homebuyer?

No, there is no first-time homebuyer requirement.  Please see the program summary via the link at the bottom of the page for more detailed information.

How long does the process take?

Lenders should be able to close a loan with the REI Home100 Program in the same amount of time it takes to close a traditional mortgage loan.

Can you use this program for manufactured housing?

No, you cannot use the REI Down Payment Assistance on loans for manufactured housing.

Can the borrower receive down payment assistance for investment property?

No, the borrower must utilize the gift on their primary residence.

Home100 Government Loan Program FAQ

How does DPA work?

For our DPA on government loans, we have multiple options in the form of both a gift and an amortizing 2nd mortgage. Please see options below:

  • Option 1A – Gift: 3% (FHA & VA) and 4% (FHA Only) Down Payment Assistance (1.5% Mortgage Company compensation a/k/a Service Release Premium (SRP))
  • Option 1B – Gift: (FHA, VA, & RD): 3.5%, 4.0%, or 5% Down Payment Assistance. (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).

Options 1A and 1B are true gifts with no repayment required or lien on the property. They are based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

  • Option 2 – Hybrid: Gift + Amortizing 2nd Mortgage: 5% (FHA Only) Down Payment Assistance (2.0% Mortgage Company compensation a/k/a Service Release Premium (SRP))
    • Gift Portion – 2.5% of Total Loan Amount applied to Minimum Required Investment (borrower must pay 1% towards MRI)
      • This portion is a true gift with no repayment required or lien on the property.
    • Amortizing 2nd Mortgage – 2.5% of Total Loan Amount applied towards Closing Costs and/or Voluntary Additional Down Payment
      • 0% Fixed Interest Rate on 2nd Mtg.
      • 10 Year Loan Term

See the program summary and income guidelines via the links at the bottom of the page for more detailed information.

Does the borrower have to pay back the down payment assistance?

Government Options 1A & 1B: No, the borrower is not required to pay back the gift upon sale or refinance; it is a true gift to the borrower.

Government Option 2: This is a hybrid option, offering 2.5% assistance as a true gift that does not have to be repaid and 2.5% as an amortizing 2nd The amortizing 2nd mortgage portion must be paid back at a fixed interest rate of 5.0% over a 10 year term.

What types of loan programs are available?

We offer a 30 year fixed rate loan with down payment assistance on the following loan products:

  • FHA – 203(b), 234(c) & 203ks (lenders must have an additional approval from U.S. Bank HFA Division to originate 203ks loans)
  • VA – 203(b) & 234(c)
  • Rural Housing Guaranteed Loan
  • Rate/term refinance loans are not available at this time

REI is not QM Exempt  – all loans must meet QM guidelines.

Who funds the DPA?

  • REI will wire the Gift Funds to title prior to closing upon approval of the Funding Request Stage in the Lender Portal.
  • The Lender will fund the amortizing 2nd mortgage funds prior to closing upon approval of the Funding Request Stage in the Lender Portal and service the 2nd mortgage until US Bank purchases the 1st and 2nd Mortgage from the lender.

Are there income restrictions?

Government Option 1A and 1B (FHA & VA) : QUALIFYING income must not exceed Program Government Limits. Click the links at the bottom of the page to see the income limits.

Government Option 2: HOUSEHOLD income must not exceed program limits

    • Household Income means the combined gross annual income of borrower(s) and any person or persons who intend to occupy the home as a principal residence. The income of all household members who are 18 years of age or older (exceptions may apply for full-time dependent students) – must be included in the total annual income calculation, whether or not they will execute the promissory note. If married, the gross annual income of the spouse must also be included even if the spouse is not going to occupy the property or execute the promissory note. Temporary, nonrecurring, or sporadic income should not be counted.  Please refer to HUD’s income calculation information at 24 CFR 5.609 (b)(1).

Rural Development Loans – Income is based on Adjusted Household Income per Rural Development’s Guidelines. Income limits can be found at the following link: https://www.rd.usda.gov/files/RD-GRHLimitMap.pdf

*Please be advised there are separate income limits for Option 1, Qualifying Income and Option 2, Household Income.

Lenders will be responsible for ensuring that the income meets program guidelines.

Are Seller concessions allowed?

Seller concessions are allowed as determined by the First Mortgage Program selected.

Does the borrower have to take a homebuyer education class?

Homebuyer education is recommended, but not required.

What are the underwriting, credit score, and DTI guidelines?

Loans may be underwritten through an automated underwriting System (DU or LP) – Rural Development Loans (GUS).    Source of funds should be Non-Seller funded Non-Profit (not a government agency)

Automated Underwriting

Product TypeProperty TypeMinimum FICOMaximum DTI
DU, LPA, GUS
Required Reserves
FHA1-2 Units
Condos/Townhomes
64045%As determined by DU, LPA, GUS
FHA1-2 Units
Condos/Townhomes
68045.01 - 50%As determined by DU, LPA, GUS
VA
USDA/RD
1-2 Units
Condos/Townhomes
64045%As determined by DU, LPA or GUS

Manual Underwriting Guidelines

Loans may only be manually underwritten for erroneous, inaccurate, or insufficient credit. Loans must comply with the requirements of the FHA, VA, or USDA/RD guidelines per the selected product. This includes but is not limited to the following requirements:

  • EXCEPTION: FHA Loans
  • If the HFA, VA, or USDA/RD require more in reserves than listed in the LTV / DTI / FICO tables below; the greater number of months must be documented.
Product TypeProperty TypeMinimum FICOMaximum Ratios - HousingMaximum Ratios - Total DebtMinimum Required Reserves
FHANOT ALLOWED
USDA1-2 Units
Condos/Townhomes
64029%41%2
VA1-2 Units
Condos/Townhomes
640N/A41%2

What are the lender compensation guidelines and program fees?

TypeAmountService Provider
Loan Origination FeeUsual and CustomaryLender
Mortgage Company Compensation a/k/a Service Release Premium (SRP)Option 1A: Gift - 1.5%
Option 1B: Gift - 2.5%
Option 2: Hybrid Gift + 2nd Mortgage - 2.0%
Lender
Investor Fee Funding Fee$400.00Lender
Investor Tax Service Fee$84.00Lender
Code Compliance Fee$185.00 - Paid at ClosingHilltop Securities

Home100 Conventional Loan Program FAQ

How does DPA work?

For our DPA on conventional loans, we have multiple options in the form of a gift, forgivable 2nd mortgage, and amortizing 2nd mortgage.

Freddie Mac HFA Advantage:

  • Option 1A – Gift: 3% Down Payment Assistance (1.5% Mortgage Company compensation a/k/a Service Release Premium (SRP))
  • Option 1B – Gift: 0%, 3.5%, 4.0%, or 5.0% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).

Freddie Mac Options 1A & 1B are true gifts with no repayment required or lien on the property. They are based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Fannie Mae HFA Preferred:

  • Option 1A – Forgivable 2nd Mortgage: 3% Down Payment Assistance (1.5% Mortgage Company compensation a/k/a Service Release Premium (SRP))
  • Option 1B – Forgivable 2nd Mortgage: 0%, 3.5%, 4.0%, or 5.0% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).

Fannie Mae Options 1A & 1B are forgivable 2nd mortgages with 0% interest, forgiven monthly over 7 years. They are based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Freddie Mac HFA Advantage AND Fannie Mae HFA Preferred:

  • Option 2 – Amortizing 2nd Mortgage: 5% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).
    • 0% Fixed Interest Rate on 2nd Mtg.
    • 10 Year Loan Term

Freddie/Fannie Option 2 is an amortizing 2nd mortgage. It is based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Please see the program summary via the link at the bottom of the page for more detailed information.

Does the borrower have to pay back the assistance?

  • The assistance the borrower receives with the Freddie Mac HFA Advantage loan is a gift and does not have to be repaid.
  • The assistance the borrower receives with the Fannie Mae HFA Preferred loan is a 7-year forgivable second mortgage, forgiven 1/84th each month, beginning the first full month after closing.  There is no forgiveness for partial months.
  • Please see the program summary, via the link at the bottom of the page, for more detailed information.

What types of loan programs are available?

We offer a 30 year fixed rate loan with down payment assistance on the following conventional loan products:

  • Fannie Mae HFA Preferred up to 97% LTV
  • Freddie Mac HFA Advantage up to 97% LTV

REI is not QM Exempt  – All loans must be QM loans based on New QM Rule.

Who funds the DPA?

  • REI will wire all gift and forgivable 2nd Mortgage funds to the title company prior to closing upon approval of the Funding Request Stage in the Lender Portal
  • The Lender will fund the amortizing 2nd mortgage funds prior to closing upon approval of the Funding Request State in the Lender Portal and service the 2nd mortgage until US Bank purchases the 1st and 2nd Mortgage from the lender.

Are there income restrictions?

The borrower’s qualifying income must not exceed Program Income Limits. Click the links at the bottom of the page to see the income limits.

Lenders will be responsible for ensuring that the income meets program guidelines.

Are Seller concessions allowed?

  • 3% maximum for CLTV greater than 90%
  • 6% maximum for CLTV less than or equal to 90%.

May be used for closing costs and/or single or split MI premiums

Does the borrower have to take a homebuyer education class?

Required if all borrowers are first-time homebuyers, at least one borrower must complete pre-purchase homebuyer education and counseling.  The following courses listed are acceptable:

Lender must retain a copy of the certificate of course or counseling completion in the loan file.

What are the underwriting, credit score, and DTI guidelines for Fannie Mae HFA Preferred?

Fannie Mae HFA Preferred

DU finding of approve/eligible and meet all other guidelines listed in this Program Summary. (HFA Preferred is available through DU using the “Additional Data Screen – then select HFA Preferred.)

Property TypeMaximum
LTV
Maximum
TLTV/CLTV
Maximum
DTI
Minimum
Fico
Required Reserves
1 Unit
Condos/Townhomes
97%105%45%640As determined
by DU
1 Unit
Condos/Townhomes
97%105%45.01 - 50%680As determined
by DU

MANUAL UNDERWRITING GUIDELINES  – Loans may be manually underwritten for erroneous, inaccurate, or insufficient credit.   

  • For Fannie Mae HFA Preferred if one or more borrowers have no credit score, lenders must follow Fannie guide chapters B5-6-03 and B3-5.4-01, B3-5.4-02, and B3-5.4-03 for manual underwriting with non-traditional credit.
  • If the HFA, GSE, or MI require more in reserves as listed in LTV / DTI / FICO tables below; the greater number of months must be documented.
Property TypeMaximum
LTV
Maximum
TLTV/CLTV
Maximum
DTI
Minimum
Fico
Minimum
Required
Reserves
1 Unit
Condos/Townhomes
95%105%36%6802
1 Unit
Condos/Townhomes
95%105%36%6606
1 Unit
Condos/Townhomes
95%105%45%7202
1 Unit
Condos/Townhomes
95%105%45%7006

What are the underwriting, credit score, and DTI guidelines for Freddie Mac HFA Advantage?

Freddie Mac HFA Advantage

LP finding of Accept/Eligible and meet all other guidelines listed in this Program Summary. (Offering Identifier: HFA Advantage (LPA v5.0.06 or higher Home Possible Advantage for HFA’s (LPA Legacy) or Using the code 251.)

Property TypeMaximum
LTV
Maximum
TLTV/CLTV
Maximum
DTI
Minimum
FICO
Required
Reserves
1 Unit
Condos/Townhomes
97%105%45%640As determined
by LP
1 Unit
Condos/Townhomes
97%10545.01-50%680As determined
by LP

MANUAL UNDERWRITING GUIDELINES – Loans may be manually underwritten for erroneous, inaccurate, or insufficient credit.

  • For Freddie Mac HFA Advantage at least one borrower must have a usable credit score, meet the minimum FICO score requirements, and adhere to Freddie Mac guidelines for HFA Advantage.
  • If the HFA, GSE, or MI require more in reserves as listed in LTV / DTI / FICO tables below; the greater number of months must be documented.
Property TypeMaximum
LTV
Maximum
TLTV/CLTV
Maximum
DTI
Minimum
FICO
Minimum
Required
Reserves
1 Unit
Condos/Townhomes
97%105%45%6602

Which Mortgage Insurance (MI) companies participate in the program?

  • Arch
  • Essent
  • Enact
  • MGIC
  • National MI
  • Radian

What is the MI Coverage?

MI Coverage for Qualifying Incomes
Fannie Mae HFA Preferred and Freddie Mac HFA Advantage
18% for LTVs >95% and < = 97%
16% for LTVs >90% and <= 95%
12% for LTVs >85% and <=90%
6% for LTVs >80% and <= 85%

What are the MI Payment Options?

  • Borrower Paid – monthly with annual renewal
  • Split Premium
  • Single Premium

****Base loan plus financed MI cannot exceed 97% LTV.****

What are the lender compensation guidelines and program fees?

TypeAmountService Provider
Loan Origination Fee - 1st MortgageUsual and CustomaryLender
Mortgage Company Compensation a/k/a Service Release Premium (SRP)Option 1A: Gift - 1.5%
Option 1B: Gift - 2.5%
Option 2: Amortizing 2nd Mortgage - 2.5%
Lender
Investor Funding Fee - 1st Mortgage$400.00Lender
Investor Tax Service Fee - 1st Mortgage$84.00Lender
Code Compliance Fee - 1st Mortgage$185.00 - Paid at ClosingHilltop Securities